Forget Saylor: Here’s the Real Reason Bitcoin Is Struggling

TLDR

• Bitcoin has dropped over 16% in the past month while the S&P 500 hit all-time highs
• Spot bitcoin ETFs shed 62,794 BTC over three weeks, the second-largest outflow streak on record
• Charles Schwab’s Jim Ferraioli says bitcoin is losing the “momentum trade” to AI stocks and IPOs
• A $1.26 billion block sale of BlackRock’s IBIT ETF was flagged as a large investor exiting bitcoin
• Total crypto market cap has fallen to $2.38 trillion, down 46% from its October peak

Bitcoin is no longer the most exciting trade in the room. Analysts say capital is flowing out of crypto and into artificial intelligence stocks and anticipated IPOs, leaving bitcoin stuck in a slow bleed.

Bitcoin has lost more than 16% of its value over the past month. Over the same period, the S&P 500 climbed to all-time highs, up around 5%.

Ferraioli argues that bitcoin is primarily a retail, momentum-driven asset. When another trade gets hot, crypto investors follow the money.

Right now, that money is going into AI.

AI Stocks Are Winning the Attention War

Nvidia shares have gained nearly 1,500% since ChatGPT launched in late 2022. AI infrastructure stocks, data centers, and advanced computing companies have posted strong returns, making it hard for bitcoin to compete.

Hougan said crypto has shifted from a momentum trade to a contrarian bet, which requires patience rather than excitement.

Spot bitcoin ETFs lost 62,794 BTC over three weeks. That is the second-largest outflow streak on record. The selling accelerated after bitcoin failed to break above its 200-day moving average.

Warning Signs in the Derivatives Market

CME bitcoin futures open interest has dropped to its lowest level since October 2023, a sign institutional traders are pulling back.

Funding rates in perpetual futures have moved higher even as bitcoin’s price falls. That means leveraged long positions are building into a weakening market. K33 called this a red flag.

On May 26, a $1.26 billion block sale of BlackRock’s IBIT bitcoin ETF was recorded off-exchange. NYDIG research described it as a large investor seeking a rapid exit, not a hedge fund strategy unwind.

Upcoming IPOs are adding to the pressure. SpaceX is preparing a listing that could value it at $1.8 trillion. Anthropic and OpenAI IPOs are also on the radar. K33 says that pipeline may be pulling more capital away from crypto.

Total crypto market cap now sits at $2.38 trillion, down 46% from its October peak.

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